From IT guy to head of an advertising giant
Maurice Lévy is reflecting on 50 years in the business, having said he will relinquish the reins of the world's third-largest advertising agency holding company
Maurice Lévy has been in advertising a long time. Longer than almost anyone else. But it wasn't his first choice.
As a young man, he wanted to be a surgeon, but he couldn't stand the sight of blood.
"Instead of saving lives, I help people consuming more," he said onstage during an event in Toronto recently. "I'm not sure it's the right thing to do, from a human point of view – a philosophical point of view – but I love this business."
Mr. Lévy, 74, is reflecting on 50 years in the ad business, having said he will relinquish the reins of the world's third-largest advertising agency holding company, Publicis Groupe, next year. Some are skeptical that the successor to Publicis founder Marcel Bleustein Blanchet will ever take his hands off the business entirely. Rival and WPP chief executive officer Sir Martin Sorrell, with whom Mr. Lévy has publicly traded insults, once called him the "Freddy Krueger of advertising," invoking the Nightmare on Elm Street villain who seemingly cannot be killed. Mr. Sorrell, no spring chicken himself, continues to lead WPP at age 71.
During that half-century career, the goals of marketing have changed very little, but the technology has been completely reshaped. Advertisers are gathering more and more data every day about who and where their customers are.
That has caused some backlash: Irritated consumers are downloading ad-blocking software in greater numbers. Many do not trust companies to handle their data correctly.
"It is a question of how we are using this information without invading the private life, and without being intrusive," Mr. Lévy said during an interview over eggs, toast and yogurt at his downtown hotel earlier in the day. "… [Otherwise] it's a waste of time. It's a waste of energy and money. We are wasting the investment of our clients. And we are losing the relationship with that person. … We have to be extremely, extremely cautious."
He proposes one possible solution: Give people ownership over their own data. He suggests that the industry could construct a system where each person decides how much of their information is shared, and receives compensation – at least a few pennies – every time it is used to target them with marketing messages. It sounds like an unrealistic, Herculean task, but what he is speaking to is the fact that marketing requires a revamp, if people's trust and attention is to be won back.
Mr. Lévy has been thinking about the change that technology presents for some time. After all, he started out as the IT guy.
After studying computer science, early in his career Mr. Lévy was considering job offers. One was at France's atomic energy commission, the other at a bank. While the work was interesting, he blanched at the "boring" environment. Then a friend told him that an ad agency called Synergie was looking for a head of IT. Although only 24, Mr. Lévy applied. (He lied and said he was 26.)
A cinema buff, he was thrilled to see that the agency was located in the same building where the Louis Malle movie Ascenseur pour l'échafaud was filmed. Instead of an "elevator to the gallows," the same lift took him away from the corporate lifestyle he had feared.
"I saw all these young people – the guys with sneakers and jeans, the girls in miniskirts – I was looking and I said, 'Wow. This is a good place,' " he recalled.
Mr. Lévy is often credited for his charm; he is an easy conversationalist and comfortable working a room. Some of that charm, however, would be better left in the seventies, watching the miniskirts go by. At an onstage Q&A capping off Canada's Advertising Week that day, Mr. Lévy interrupted my first question as moderator, asking me to stand before the audience and gesturing to my dress. He pointed to my lapel microphone, its wire strung out of sight.
"How have you been mic'd?" he asked. "With great agility," I joked, sitting down. "It's very, very interesting," he continued. "What we do in advertising is we look at people, how they behave … so the way you have been mic'd is something which is probably a – an observation. I can see the guy who is –" I interrupted him to say I had done it myself, not left it to the audio guy. "Too bad," he replied.
After a heightened awareness in recent years of the need for diverse leadership in the industry, it was a casual but jarring reminder of the dinosaur attitudes that can persist, even at the top. Following the event, some women in the ad industry contacted me to express their dismay at that reminder.
A few weeks after Mr. Lévy's visit, that issue was reignited by the news of a lawsuit alleging that WPP-owned ad agency J. Walter Thompson's global CEO had engaged in racist and sexist behaviour repeatedly in the workplace. At an industry conference last week, Mr. Lévy said: "I don't believe that what happened at JWT is exemplary of what's happening in our industry. It's a one-man mistake." After he was criticized for his remarks, he clarified in a memo to employees this week that he was referring to the extreme nature of the alleged behaviour, and wrote that he recognizes "there is a lot of work left to be done" on diversity in the industry.
Professionally, at least, Mr. Lévy made a name for himself by being forward-looking: He wrote an early algorithm for measuring advertising audiences, for example. Five years into his job at Synergie, with the CEO retiring, he was offered the position. Impulsively, he quit. If he was the best in the room, he decided, he was in the wrong room. His pregnant wife, to put it mildly, was concerned. "Stupid" and "arrogant" were among the words she used to characterize the snap decision.
Within a few days, Publicis came calling. It was 1971, and he was hired to completely revamp the agency's outdated and teetering record-keeping system. He immediately imposed his own mania for work on to his team: For 10 months, as he tells it, there were no weekends or holidays.
Then in 1972, a fire tore through the agency's offices. Standing outside the burning building, two things struck Mr. Lévy: panic that some of his people might be inside, and horror at the thought of months of his 70-person team's ceaseless work being destroyed. The fire was not yet under control, but again relying on impulse, he rushed inside, disguising himself with a fireman's jacket and helmet.
"It's a moment in life where you are acting spontaneously, and you are past rationalizing," he recalled. Inside, it was "an apocalypse." He threw the tapes and disks out the window to colleagues standing outside, and they were able to salvage their months of work.
It's an episode that is often cited as an early sign to agency leaders that Mr. Lévy could be a candidate for the top job. In 1987, he was appointed CEO and has overseen an acquisitive period that expanded the company with the addition of multiple agencies, including Saatchi & Saatchi, Digitas and Leo Burnett, among others. One notable Canadian acquisition did not stick: Toronto agency Bensimon Byrne's management group, unhappy with operating under a holding company structure, bought the firm back from Publicis in 2006.
Today, although Mr. Lévy cannot write code, he believes his background gives him a unique perspective on the digital changes facing the industry. That has not entirely shielded Publicis from challenges, however.
"The big fallacy around the whole positive argument for Publicis for a number of years was that they were more exposed to digital than many of their peers. Well, not really," said Brian Wieser, an industry analyst at New York-based Pivotal Research Group. "We never saw group-level organic growth really go above and beyond peer level, despite having such heavy investments in this space."
An especially heavy investment came in 2014, when Publicis announced it would buy Boston-based Sapient Corp. for $3.7-billion (U.S.), a 44-per-cent premium on the stock. Publicis heralded the deal as a major step forward in its digital strategy: The company includes digital marketing services agency Sapient Nitro, although it also includes divisions that are not an obvious fit for an ad agency holding company, such as military and oil industry consulting services.
Just a few days after the deal was announced, Sapient's profit fell 15 per cent, missing analyst expectations. In the following two quarters, its growth slowed as well, although Sapient has been performing better recently. Is Mr. Lévy concerned that the company overpaid for its latest crown-jewel acquisition? "I feel extremely confident on the success of the integration of Sapient. … I believe that this will set us apart."
Sapient also has sizable operations in India, and Publicis is beginning to consider offshoring some of its marketing services there.
"It is something that we already have started," Mr. Lévy said, adding that the most obvious services to begin offshoring are digital operations. "… I have visited, personally, the operation in India and it's very impressive."
While things have improved over all for Publicis recently, it has not been a good couple of years. After its proposed merger with Omnicom fell apart in May, 2014, Mr. Lévy acknowledged that the scuppered deal had distracted management. Last year, the company was hurt by marketers who were cutting costs and delaying or cancelling campaigns.
At the same time, the media side of the business – the agencies that plan and buy ad space on behalf of marketers – was hit by a spate of companies that put their agency relationships under review. Publicis was affected especially hard, losing major clients such as Coca-Cola and Procter & Gamble. Part of what drove the turmoil across the media business were concerns about rebates – the reported practice of agencies collecting kickbacks from media companies for buying ad space. Mr. Lévy dismissed any concerns about media agency transparency under Publicis.
"We are extremely comfortable with our approach," he said. "We don't have the feeling that this is an issue for us."
Publicis lagged competitors in 2015, with organic revenue – a common measure of health in the industry – growing just 1.5 per cent. It has told the market to expect "modest" growth this year, its 90th year in business, as it undertakes a restructuring of the 76,000-person company, organizing under four branches: Publicis Healthcare, Publicis Communications, Publicis Media and Publicis.Sapient, which will handle much of the digital business as well as consulting services. It's a move to combat consulting companies such as Deloitte and Accenture, which increasingly are competing with ad agencies for marketers' business.
Publicis recently had its first major account win under the new structure, with P&G handing over the creative responsibility for its dishwashing business in 32 countries to Publicis Communications.
The reorganization is another way Mr. Lévy has reshaped the company.
"All the agencies are struggling to see how they should better serve the client in a world that is transforming itself," he said. "… We can say to our client, okay, you need to transform in order to fit the future, and we ourselves are still working with the old model. So we had to change ourselves … to show clearly that we are true to our words when we say, the world is changing, you need to transform. This is the global picture."